Campaign Promises

Cabinet/Departments -> Treasury -> Corporate Taxes


ItemTreasury
Corporate TaxesGrade
TY-1
The Promise: "Eliminating special tax breaks for oil and gas companies: including repealing special expensing rules, foreign tax credit benefits, and manufacturing deductions for oil and gas firms."
When/Where: Barak Obama's "Comprehensive Tax Plan" dated 08/20/08.
Source: http://halebobb.com/Obama/Factsheet_Tax_Plan_FINAL.pdf
Status:As of end-CY2016, oil and gas companies continued to benefit from the following tax breaks, among many:

- domestic manufacturing deduction for oil and gas production;
- deductions for the depletion of oil and gas deposits;
- deductions for tertiary injectants;
- deductions for the depletion of oil shale deposits;
- marginal wells tax credit;
- deductions for the costs of oil shale exploration and development;
- amortization of geological and geophysical expenditures;
- deductions for the costs of drilling wells; and
- exception to passive loss limitation for working interests in oil and natural gas properties.

By some accounts, repealing the above tax breaks would have potentially saved the U.S. taxpayer $40B over a period of 10 years.

This promise was not fulfilled.
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TY-2
The Promise: "Will eliminate all capital gains taxes on investments in small and start-up firms."
When/Where: Barak Obama's "Comprehensive Tax Plan" dated 08/20/08.
Source: http://halebobb.com/Obama/Factsheet_Tax_Plan_FINAL.pdf
Status:Under the American Recovery and Reinvestment Act of 2009, signed into law 02/17/09, investors in small businesses were able to exclude 75% of their gain from capital gains taxes -- not 100% ("all capital gains taxes") as promised.

The Small Business Jobs and Credit Act of 2010 (H.R. 5297), signed into law by President Obama on 09/27/10, exempted 100% of the taxes on capital gains for angel and venture capital investors on small business investments if held for five years. This was a short term solution to spur investment in small businesses immediately and applied only for stocks bought prior to the end of CY2010.

By end-CY2011, the exclusion rates returned to 50% for C-Corporations with less than $50M in assets and 60% for select businesses in empowerment zones.

By end-CY2016, the exclusion rate remained at 50% of capital gains for small businesses. This exclusion on the small business capital gains tax was limited to $10M or 10 times the cost basis of shares. The maximum capital gains tax rate on long-term capital gains profits remained at 15%.

This promise was not fulfilled.
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TY-3
The Promise: "Raise the small business investment expensing limit to $250,000 through the end of 2009."
When/Where: Obama-Biden Plan: "Revitalize the Economy," dated 11/07/08.
Source: http://www.asbl.com/documents/Economy_Change.pdf
Status:Section 179 of the American Recovery and Reinvestment Act of 2009 (ARRA) stipulated that small businesses could elect to expense up to $250,000 of the cost of qualifying property. The $250,000 amount provided under the new law was to be reduced if the cost of all section 179 property placed in service by the taxpayer during the tax year exceeded $800,000.

These provisions were repeated in Section 201 of the Hiring Incentives to Restore Employment Act (H.R. 2847) signed into law by President Obama on 03/18/10 and remained in effect until 12/31/10.

This promise was fulfilled.
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TY-4
The Promise: "During 2009 and 2010, existing businesses will receive a $3,000 refundable tax credit for each additional full-time employee hired."
When/Where: Obama-Biden Plan: "Revitalize the Economy," dated 11/07/08.
Source: http://www.asbl.com/documents/Economy_Change.pdf
Status:Initial estimates were that this promise would have cost $40-50B over the two-year CY2009-CY2010 period.

This promise was excluded from American Recovery and Reinvestment Act of 2009, signed into law 02/17/09. The promise was also excluded from the President's FY2010 budget proposal.

Unemployment realities in CY2009 (rising to 10% by 10/31/09) forced reconsideration, as President Obama proposed raising the tax credit level for each newly hired person to $5,000 during his State of the Union address of 01/27/10. At that time, he said that the $5,000 per-worker tax credit he proposed would be available to businesses of any size, and would be retroactive to the start of 2010.

On 03/18/10, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847) into law. Section 101 of this bill provided a tax exemption for non-federal or state employers for qualified employees hired between 02/03/10 and 12/31/10 who had not been employed for more than 40 hours during the 60-day period prior to employment.

The non-refundable tax credit was limited to the "lesser of $1,000 or" 6.2% of wages paid during the 52-week period following employment. The estimated cost of this initiative stood at $30-100B, reportedly to be funded from left-over Troubled Asset Relief Program (TARP) funds.

Thus, the tax credit that ultimately came into effect in CY2010 did not apply to CY2009 as promised, was not refundable, and was limited to $1,000, not $3,000.

This promise was not fulfilled.
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TY-5
The Promise: "Will extend the federal Production Tax Credit (PTC) for 5 years to encourage the production of renewable energy."
When/Where: Obama-Biden Plan: "New Energy for America", dated 09/06/08.
Source: http://energy.gov/sites/prod/files/edg/media/Obama_New_Energy_0804.pdf
Status:The American Recovery and Reinvestment Act of 2009, signed into law 02/17/09, extended the PTC for 3 years to CY2012, not 5 years as promised.

On 08/02/12, the Senate Finance Committee added an additional one-year extension of the $12B PTC as part of a larger tax credit extension bill.

On 01/01/13, President Obama signed the "American Taxpayer Relief Act of 2012" (H.R. 8), extending the PTC for facilities producing energy from renewable resources by one additional year to 01/01/14. In the aggregate, PTC extensions equaled five years during President Obama's first term in office.

This promise was fulfilled.
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TY-6
The Promise: "Require publicly traded financial partnerships to pay the corporate income tax."
When/Where: Interview with Tax Policy Center of Urban and Brookings Institutions dated 08/15/08.
Source: http://www.taxpolicycenter.org/UploadedPDF/411749_updated_candidates.pdf
Status:Participants in Publicly Traded Partnerships (PTP) are taxed on the money distributed by the partnership. Unlike a corporation, a PTP itself does not pay taxes on its income. Income is only taxed once when it is distributed to general and limited partners.

This is why businesses organized as PTPs are known not to pay one penny in federal corporate income tax. Rather, they rely on "pass-throughs," meaning that they pass profits to investors. It is these investors who pay taxes through their individual tax returns on dividends received.

As of end-CY2016, a PTP could still avoid paying corporate taxes if 90% or more of the PTP's gross income consisted of qualifying income. Examples of qualifying income:
- interest;
- dividends;
- royalties;
- real property rents;
- gain from the sale/disposition of real estate;
- income and gains from the exploration, development, mining, or production, processing, refining, transportation, or marketing of any mineral or natural resource, industrial source carbon dioxide, or the transportation or storage of specified renewable fuels;
- income and gains from commodities, if buying and selling of commodities is the PTP's principal activity; and
- any income that would be qualifying income for a regulated investment company (RIC) or a real estate investment trust (REIT).

This promise was not fulfilled.
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TY-7
The Promise: "...will also create a new Small Business Health Tax Credit to provide small businesses with a refundable tax credit of up to 50 percent on premiums paid by small businesses on behalf of their employees."
When/Where: Obama-Biden Plan: "To Lower Health Care Costs and Ensure Affordable, Accessible Health Coverage for All" dated 10/03/08.
Source: http://courses.ischool.berkeley.edu/i202/f08/lectures/Obama_Healthcare-1.pdf
Status:The definition of a "small business" in the USA is one having fewer than 500 employees for manufacturing businesses, has less than $7.5M in annual receipts for most non-manufacturing businesses, and meets regulatory requirements established by the Small Business Administration (SBA) under 13 CFR Part 121.

Under the Patient Protection and Affordable Care Act (Public Law 111-148) signed into law by President Obama on 03/23/10, small businesses with no more than 25 employees received a non-refundable tax credit of 35% of contributions made toward the health care premiums of their employees during the period CY2010-2013. That percentage increased to 50% starting in CY2014.

The tax credit did not apply to all businesses classified as "small business" by the SBA and it was not refundable.

This promise was not fulfilled.
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TY-8
The Promise: "Will target tax incentives to lure businesses to the hardest hit areas of the Gulf Coast including downtown New Orleans and St. Bernard Parish."
When/Where: Obama-Biden Plan: "Rebuilding the Gulf Coast and Preventing Future Catastrophes", dated 09/11/08.
Source: http://blatantreality.com/wp-content/uploads/2009/05/obama_factsheet_katrina.pdf
Status:The Gulf Opportunity Zone (GO Zone) Act of 2005 was signed into law on 12/22/05 by President Bush. It provided tax relief for recovery efforts in the states of Louisiana, Mississippi and Alabama, devastated by Hurricane Katrina, for a period of five years. It also provided incentives and tax relief to states affected by Hurricanes Rita and Wilma, similar to the assistance provided under the Katrina Emergency Tax Relief Act (Public Law 109-73) signed into law by President Bush on 09/23/05.

Since these CY2005 initiatives, there have been no new tax incentives or credits introduced by the Obama Administration to lure businesses to the Gulf, New Orleans, and/or Saint Bernard Parish other than the one-year extension of the above bonds under the Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010.

The New Orleans and Saint Bernard Parish areas have benefitted from the "New Market Tax Credit" (NMTC) since its inception in CY2000. For FY2011, Louisiana was the beneficiary of $295M in NMTC, all of which, except for $53M for Baton Rouge, went to New Orleans.

In addition, Louisiana has continued to benefit from pre-CY2009 federal-level Rehabilitation Tax Credits, GO Zone Bonus Depreciation, and GO Zone Bonds programs as well as other state-level tax incentives/credits.

Other than the incentives (and their extension) that existed when President Obama assumed office, he is not credited with having "targeted" any new tax incentives to lure new businesses to the GO Zone.

This promise was not fulfilled.
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TY-9
The Promise: "Make permanent...renewable energy production tax credit."
When/Where: Interview with Tax Policy Center of Urban and Brookings Institutions dated 08/15/08.
Source: http://www.taxpolicycenter.org/UploadedPDF/411749_updated_candidates.pdf
Status:The American Recovery and Reinvestment Act of 2009 provided a 3-year extension of the Renewable Energy Production Tax Credit (PTC) through 12/31/12.

President Obama's FY2010 budget proposal included $75B to make this tax credit permanent. Congress didn't go along.

On 01/01/13, President Obama signed the "American Taxpayer Relief Act of 2012" (H.R. 8), extending the PTC for facilities producing energy from renewable resources by one additional year to 01/01/14 (not permanent).

As of end-CY2016, the PTC was extended as part of the Consolidated Appropriations Act of 2016 (P.L. 114-113). This legislation extended the PTC for two years, through CY2016, for all eligible technologies. The PTC for wind was also extended an additional three years, through CY2019, but at reduced credit rates for wind facilities beginning construction in CY2017 thru CY2019.

The renewable energy PTC did not become permanent during President Obama's two terms in office.

This promise was not fulfilled.
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TY-10
The Promise: "...provide a 20 percent tax credit on up to $50,000 of investment in small owner-operated businesses."
When/Where: Obama-Biden Plan for Small Businesses, dated 09/11/08.
Source: http://obama.3cdn.net/18bdb8988efb99208a_vtt5mvfkt.pdf
Status:Considerable assistance was provided to small businesses under the American Recovery and Reinvestment Act of 2009. However, this Act did not provide a 20% tax credit on up to $50,000 of owner-operator investments.

An opportunity to deliver on this promise presented itself when President Obama signed the Small Business Jobs Act of 2010 (H.R. 5297) on 09/27/10. The Democrat-controlled Congress and President Obama did not seize this opportunity.

Another opportunity to support fulfillment of this promise presented itself by the introduction by Congressman Ron Kind (D-WI) on 07/31/14 of the Rural Microbusiness Investment Credit Act of 2014 (H.R. 5346). This proposed Act would have provided a tax credit of $10,000 (20% of $50,000) for rural microbusinesses. This Act did not advance through the House and expired with the 113th Congress.

This promise was not fulfilled.
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TY-11
The Promise: "Make permanent R&D credit..."
When/Where: Interview with Tax Policy Center of Urban and Brookings Institutions dated 08/15/08.
Source: http://www.taxpolicycenter.org/UploadedPDF/411749_updated_candidates.pdf
Status:The Research and Development (R&D) tax credit was permanently extended by Congress retroactively as of 01/01/15 when President Obama signed the "Protecting Americans from Tax Hikes (PATH) Act of 2015" on 12/18/16. This bill was incorporated as Division Q of the Consolidated Appropriations Act of 2016 (H.R. 2029).

This promise was fulfilled.
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